MicroStrategy ETF With 1.5x Leverage To Go Live Tomorrow

MicroStrategy Incorporated, one of the world’s largest corporate Bitcoin (BTC) holders is set to see the launch of a new Exchange Traded Fund (ETF) with 1.5x leverage. This move reflects the growing demand for more crypto-based products amongst institutional investors. It also shows the perception to the company’s dedication towards embracing crypto.

Another Volatile MicroStrategy ETF

Senior Bloomberg ETF Analyst Eric Balchunas highlighted the launch, stating that it would pass as one of the most volatile ETFs in history. This is similar to the initial MicroStrategy ETF MSTX offering 1.75x leverage over the MSTR stock price, that launched last week.

At the same, he noted that it would be a “touch less than top dog $MSTX (1.75x long MSTR) which btw has traded a record $50m today.” The ETF expert acknowledged the meteoric growth that the liquidity is experiencing and added that it could reach $100 million in no time.

That MicroStrategy has this type of ETF is clearly linked to its Bitcoin strategy. The business intelligence software firm embraced BTC in 2020 and has remained committed to amassing the flagship cryptocurrency for the last 4 years. As of June 30, MicroStrategy’s Bitcoin portfolio held a total of 226,500 units of the coin. The holding is currently worth around $15 billion.

Fortunately for MicroStrategy, this decision to adopt Bitcoin has triggered an upsurge in its ecosystem. MSTR, the firm’s shares, has outperformed its counterparts including 499 out of the 500 shares on S&P 500. The MicroStrategy share has even seen more growth than Bitcoin which gave its exposure in the last one year.

The exposure of MSTR to BTC has drawn firms to follow the path. For instance, Metaplanet bought more Bitcoin on August 20, triggering a massive stock surge.

Crypto ETFs Becomes Wall Street Investors Ally

Beyond the MicroStrategy ETF, Wall Street investors are seeking more ways to gain exposure to digital currencies while ensuring that they attract minimal losses. In the last six months, crypto ETFs have served as that alternative, especially with the United States Securities and Exchange Commission (SEC) giving its support to the ETFs.

Spot Bitcoin ETFs launched in January with the likes of BlackRock, Grayscale, Franklin Templeton, VanEck, Fidelity and Bitwise serving as issuers. Less than five months after, spot Ethereum ETFs followed suit, bringing more alternative to investors in the US. Top financial firms like Morgan Stanley own a slice of some of these crypto ETFs.

Since their launch, these offerings have seen a mix of market sentiments; from recording inflows to experiencing massive outflows.